Apple’s surprise shake-up could test bulls

Commentary: Forstall’s departure could add weight to the stock

SAN FRANCISCO (MarketWatch) — Apple Inc. announced its biggest management shake-up in years on Monday afternoon, one that will likely test even the most bullish of Wall Street analysts who now must contemplate the loss of a key player in the crucial iPhone business.

Some may go as far as to speculate that Apple
AAPL, -0.87%
timed its surprise news to minimize fallout on its stock, given the two-day market closure from Hurricane Sandy. On Twitter, Matt Hedgepeth said: “Good thing the markets aren’t open tomorrow. $AAPL would have taken a hit.”

The move some investors may see as bad news is that Scott Forstall, head of Apple’s iOS mobile platform, is leaving the company next year. The company also said that John Browett, its newly recruited head of retail, is leaving as well. Others might find positives in the news.

Forstall has been written about in some profiles as a potential CEO candidate to eventually succeed Tim Cook. But some reports also have painted him as a divisive force at Apple. One has to wonder if the headline of Monday’s news release — “Apple Announces Changes to Increase Collaboration Across Hardware, Software & Services” — was not telling in some way. Read: Apple’s Forstall leaving in shake-up.

Mobile chief on 4G plans for U.K.

(2:17)

Olaf Swantee, CEO of EE, the U.K.'s biggest mobile operator, discusses the 4G network his company is launching this week.

Apple said Forstall will stay on until next year, as an adviser to Cook. Eddy Cue, in charge of iTunes, will take over Siri development and maps. Apple Maps, launched with the latest iPhone 5 as a new feature in the iOS 6 upgrade, was seen by many product reviewers as not ready for prime time, and Apple subsequently apologized to consumers for any problems. Apple declined to comment further on Forstall’s upcoming exit.

The company is clearly making a big push to make its engineering and development more collaborative between hardware and software. Note that former head of hardware development Bob Mansfield will be leading a new group called technologies. Apple said that Mansfield’s new group will combine Apple’s wireless teams across the company into one group, fostering innovation at an even higher level. “This organization will also include the semiconductor teams, who have ambitious plans for the future,” according to Apple.

Whether Apple’s investors accept that explanation or see something more troubling in the departure of a key longtime executive remains to be seen. At least for another day.

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